The court granted Pfizer a stay, saying the government had not issued the company a “show cause notice” before banning the medicine. The next hearing by on Pfizer’s plea is slated for March 21.

A company logo is seen at a Pfizer office in Dublin, Ireland November 24, 2015.(Reuters)

The Delhi high court granted US pharmaceuticals firm Pfizer Inc’s Indian unit a stay order on Monday, pending a further hearing, on a government ban on its popular cough syrup Corex, two lawyers representing the drugmaker told Reuters.

The health ministry banned the combination of chlorpheniramine maleate and codeine syrup, which Pfizer sells as the cough syrup Corex, in a notice over the weekend saying it could pose a risk to humans.

The court granted Pfizer a stay, saying the government had not issued the company a “show cause notice” before banning the medicine, the lawyers said, declining to be named.

The next hearing by on Pfizer’s plea is slated for March 21.

Abbott Pharmaceuticals, which sells the same combination under the brand Phensedyl, also filed a writ petition at the same court that will come up for hearing on Tuesday, local television channels said.

Sanjay Jain, a lawyer representing the health ministry, wasn’t immediately available to comment.

Pfizer’s Indian business said earlier on Monday it had stopped selling Corex, and expected its profit to be hit, as the brand generated sales of about $26 million in the nine months through December. Its shares closed down 9% in Mumbai, before the stay order was issued.

Abbott’s Phensedyl commands around a third of India’s cough syrup market and makes up over 3% of the company’s $1 billion in revenue in India. The shares of Abbott’s Indian arm fell about 3% after it said it would comply with the ban.

Both companies declined to comment on the cases.

As the cough syrup contains the narcotic codeine, India has been privately pressuring manufacturers to better police supply chains to tackle smuggling and addiction, Reuters reported last year.

Akun Sabharwal, drugs controller for Telangana which last year detected an “illegal diversion” of Phensedyl worth about $8.5 million, said he believed the ban would end the syrup’s abuse.

Patchy regulation

The medicine was among 344 fixed-dose combination drugs India banned, saying a panel of experts found the drugs lacked “therapeutic justification”.

Market researcher AIOCD AWACS estimated it could cut sales in the local pharmaceutical industry by up to $522 million, with Pfizer and Abbott among worst hit.

Sale of fixed dose combination medicines in India require approval of the central government. But several drug combinations have entered the market over the years based on approval solely from states.

India has made intermittent efforts to shut this avenue, but success has been limited. In 2007 it ordered states to recall about 300 such combination drugs, but drugmakers challenged it in court and the order was stayed.

In 2014, India set up a panel of experts to review over 6,000 such drug combinations, and asked companies to submit data to prove safety and efficacy of their drugs. 344 of those have been banned.

OPPI, a lobby group for multinational drugmakers, criticised the move, saying codeine-based combinations under the ban have the approval of India’s drug controller, and companies were never made aware that these were being reviewed.

Drug Controller General GN Singh was not immediately available to comment.

The Indian Pharmaceutical Alliance, which represents Indian drugmakers, said the review process was not transparent.

Health ministry official KL Sharma told Reuters he disagreed, saying, “we are not prepared to tolerate anything that will (adversely) affect patients.”